Moss Brook Growers Venture Forth

At the start of 2015, after five years of growing organic veg on a 21 acre site just outside Manchester, three of us at Moss Brook Growers, Stuart Jones, Carl Turton and myself, found ourselves in a job we loved, but with a business that wasn’t making enough money and all of us working more hours than was comfortable. With the support of our landlords, Unicorn Grocery, we decided to take a break from growing and embark on a season of research instead of trying to improve our business plan. As part of this research, we ended up visiting 20 organic veg growers in the UK from Edinburgh to Exeter, ranging from smallholdings with a few acres to thousand acre estates, but with most of them having veg growing areas between 10 and 40 acres.

I should  start  by  saying  a  massive  thank  you  to  all  the  growers  who gave us so much of their time - it was a real privilege to spend time  with  such  knowledgeable  and  hospitable  people. It wasn’t  our original intention to publish our findings outside ourselves and Unicorn, but there’s been a bit of interest from other growers and, just amongst ourselves, enough of a sense that this might be useful to others, so we’ve decided to distribute our findings more widely. In this  article,  all  responses  and  quotes  are  anonymous  and hopefully minimise the amount of financial info that can be traced to specific farms. Hopefully, that’s okay and none of you mind us sharing our findings.

It is also far from scientific, and whilst we asked almost exactly the same questions at each growing site we can’t pretend to have taken a rigorous  approach  to  data  collection. It’s not  a  representative  sample of all organic veg growing, and each farm with its different soil, market opportunities etc., is so unique, only amounts to a small amount of evidence. Despite all this, hopefully it’s still useful.

What follows is a small part of the information we collected on our visits. Many of our questions related to specifics of crop growing and soil management, and the conclusions and recommendations that follow draw on wider impressions from our farm visits and other research, as well as my work at Moss Brook Growers.

How long did it take before you made a profit on growing veg? (Or just broke even)
• This question was first asked at the workshop Keeping growing: ensuring success at  the  2015  Organic  Producers’  Conference. Iain Tolhurst and Alan Schofield answered, both suggesting 10 years

• In Riverford’s  news  updates,  apparently  two  of  their  recent  farms (one in France and one near Peterborough) took 7-8yrs+ to reach viability

• Responses from  farm  visits  revealed  that  in  relation  to  the  overall farm profitability, which included retail, livestock etc., rather than just veg growing, 18 out of the 20 farms are reliant on diversified income. However:

• Two farms said they were in profit straight away - one is a CSA, the  other  a  box  scheme  where  the  grower  doesn’t  pay  himself a wage

• Two farms said break-even within three years, both were box schemes

• Three farms said five years, including one where they don’t pay themselves a wage

• One said eight years, but still not profitable. They’ve been growing for 20 years but continue on family tax credits

• Four farms indicated that they’d never made a profit. Two farms after five years of business, one after 10, saying it’s “just a question of survival”

• Some unclear answers; one farm, a box scheme, broke-even maybe after five years, and continue just to break-even, very precarious, especially  after  2012. They are  still  paying  off  debts from that year when yields were down by a third

Does your veg enterprise rely on other parts of your business (e.g. direct selling, adding value to your produce, or other parts of your farm – dairy, arable etc.)?
• 16 out  of  19  respondents,  retail  their  own  veg. One grower,  who was very representative of the others said “The difference between wholesale and retail is what pays our wages”

• For many  growers  who  run  box  schemes  or  farm  shops,  there’s significant income from buying-in produce from other growers  or  abroad. The proportion  of  bought-in  produce  ranged from 20-70%, with the average probably 30-40%

• 11 farms  sold  their  veg  wholesale,  six  of  those  relying  on  wholesale for the majority of their sales

• Farmers’ markets  were  mentioned  by  eight  farms,  with  varying proportions of influence on overall farm income. This was a significant influence on two farms, quoting annual turnover per market of between £60-90,000

• Two veg growing sites are part of bigger, very diversified, estates - at both of these sites it was clear the veg growing was not making a profit and was being subsidised by other parts of the estates.

Do you know your costs of production for each crop?
• 15 replies of ‘No’ (including one person who just laughed at the question!)

• One said yes, another suggested that he knew for some crops

How many hours do you work a week?
• Six farms  where  the  main  grower  works  70+  hour  weeks  all  year  round. Responses included  comments  like  “there’s  a  few  weeks  in  the  year  when  it’s  more  like  100hrs”,  “if  you  don’t work weekends, jobs get left behind”, “I see the kids in between when I can”, “no time to see my [grown-up] children”

• Four farms:  70+  hour  weeks  in  the  main  season  [assuming  Mar-Nov], less in winter

• Four farms: 60-65 hours per week; “but up to 80 or 90 a week at height”

• Two farms: 50-60 hours a week in main season, 30-40 hours out of season. One said he has plenty of time for family “it’s all worked out with low labour input”

• Two farms: 45-50 hours per week• There is a clear difference for employed staff, e.g. 39 hrs/wk (no weekends), 40 hrs/wk, 8-5pm working hours, with paid breaks

How do you value your time? What wage do you earn and is it based on hours done?
• Many answered  this  without  giving  specific  earnings, understandably, but a representative comment seemed to be: “If I factored in every hour, my overall wage would work out less than minimum wage”

• One farm:  £10k  annual  wage  for  70hr  weeks  but  business  covers costs like house rent, running a vehicle, utility bills

• One farm:  approx.  £14,400pa  for  60-65hr  weeks  -  including  business costs but not mortgage

• One farm: £11/hr head grower, other growers £9.50/hr• Three farms: no wage at all for main growers

• Two farms: head grower gets paid a wage whatever happens (part of bigger estate)

• Two farms mentioned that they rely on family tax credits

• More specific info given about staff wages: three farms paying between £7.00-£7.50/hr; three farms paying the living wage (£7.85 in 2015); one farm paying £8.50-9.00/hr for agency staff; one farm where main employed grower earns an annual salary of £24k as primary veg worker

• Three farms  where  evidence  showed  growers  earned  less  than their employed staff

Some conclusions
Following these visits together with analysis of our own business at Moss Brook, I’ve increasingly come to view the issues around starting or  sustaining  a  veg  growing  business  as  managing  different types of risk:

Natural risk:
1. First -  the  weather. Every farm  is  exposed  to  changeable  weather  patterns  and  the  increasing  possibility  of  more  extreme weather events. An obvious way to mitigate this risk is through  diverse  cropping,  something  we  lacked  at  Moss  Brook. However, we  were  perhaps  more  vulnerable  to  the  horror show of 2012 not only because we were inexperienced but also because we only grew annual field veg with no perennials and no protected cropping.

2. Secondly, there’s  the  natural  risk  of  selling  fresh,  perishable  products, which can tip the trading balance of power against growers. We had close relationships with our customers and regular detailed  crop  planning  meetings,  and  as  a  result  we  had nearly zero wastage of our crops, either in-field or post-harvest. However, wastage  could  possibly  be  quite  high  on  other farms.

Financial risk
1. Capital: an obvious risk, especially to new entrants. We were extremely lucky that we were able to fundraise a lot of the money needed for our initial infrastructure costs, but how many new entrants can  hope  for  that  kind  of  help? Personally, I  think  there’s  been  a  lot  of  focus  on  small-scale  intensive  growing  models  as  good  entry  points  for  new  growers,  but  this  only  has the potential to satisfy a small percentage of the market. For example, around Manchester, there is a stronger need for new field-scale veg growers than any other type of growing and this can mean significantly higher capital requirements.Perhaps we should have asked more questions on our farm visits about the level of investment or total value of the on-site assets. On our bare 21acre field site, we put in over £100k of infrastructure and around £50k worth of tractors, implements, tools, netting,  packaging  etc. - is  that  representative? From our questions, it looks pretty minimal and if so, these figures could be an enormous barrier to new growers.

2. Lack of  Profit:  the  evidence  above  suggests  the  need  for new  growing  sites  to  carry  losses  for  at  least  five  years before  breaking  even,  and  for  some,  profit  can  be  rare after  these  initial  years. What’s particularly  interesting  is  the diversification of income on most of the farms visited - primarily  through  retailing  their  own  and  other  people’s  produce. What would  tell  us  more  is  the  proportion  of  profit (rather than just income) from each of the different enterprises  on  the  farm. For example,  is  it  diversity  of  income   that   helps   these   farms   survive   or   is   it   greater   profit  earned  from  retail  or  other  non-growing  activities? Just 5%  of  our  income  at  Moss  Brook  came  from  non-growing  including  money  from  Agri-Environment  Scheme  and a small amount for contracting and waste management. After our research, we reckoned we could increase our non-growing income to 10% of our turnover. This still looks low compared to the farms we visited and also to the evidence in the  annual  Farm  Business  Survey,  where  the  average  on  organic  horticultural  holdings  looks  to  be  over  15%. Therefore, it  appears  vital  that  new  entrants  to  organic  growing have significant diversified income streams built into their business plans.

3. Low Income: there was a range of replies from our farm visits, from growers taking no wage at all to those who are guaranteed a wage from the wider farming estate. It’s difficult, therefore, to pick a representative wage level for growers, but seems fair to say it’s low! The comments about relying on family tax credits are pertinent, as this was our experience as well as the fact that some growers  are  paying  their  staff  more  than  themselves. Overall, I think this evidence paints a grim financial picture. If you’re  a  new,  young  entrant,  quite  possibly  with  student  debts,  you  might  reasonably  expect  to  take  on  extra  debt  for  the  capital  to  be  spent  on  a  new  business,  including  infrastructure,  machinery,  possibly  the  land  itself. Even the  Jean-Martin Fortier, super-small-scale intensive type of model (The Market Gardener: A Successful Grower’s Handbook for Small-Scale Organic Farming), you’re looking at £20k+ minimum to start up. This could easily be £100k+ if you’re buying the land or get into field-scale veg. On the evidence above, you might be looking at five years+ of making a loss and presumably getting into more debt, followed by the possible glory years of making next to no profit... does that sound like a good idea?

4. Difficulty of Business Planning: for me, the most damning evidence of the financial difficulties of starting or sustaining a veg growing business is how few growers know their own costs  of  production. As primary  producers  feeding  into  a  supply  chain,  this  is  an  extraordinarily  weak  position  to  be  in. As business owners trying to plan ahead with financial forecasts, it’s  like  a  blindfold  -  let  alone  trying  to  cost  up  investments  in  machinery,  or  analyse  what  crops  to  drop  and others to take on. This is obviously a complex area, with many factors  involved  in  working  out  costs,  but  perhaps  what  surprised  me  more  was  the  number  of  growing  sites  that hardly did any record keeping at all - even, for example, basic things like yields.

People and skills risk
I think this is one of the more overlooked areas of risk in farming generally, but  it  appears  to  me  to  be  especially  important  in  the  organic  veg  growing  businesses  we  visited,  and  it  manifested  itself in a few ways:

• Physically:   the  number  of  bad  backs  or  other  injuries  was  striking and, for my own part, I have two slipped discs that are due to the growing job. (Great to see some yoga moves in the last issue of OG!)

• Families:   the  number  of  broken  relationships  as  well  as  growers seeing very little of their children was - for the two of  us  at  Moss  Brook  with  young  families  -  very  sobering. (I realise  it’s  not  possible  to  attribute  the  cause  of  broken  relationships  solely  to  the  demands  of  veg  growing,  but  I  think it’s fair to assume that 70hr weeks aren’t going to help!)

• Huge dependence  on  one  or  two  key  people:  the  burden  of skills, time, management stress and financial resilience appeared  to  fall  disproportionately  on  those  key  people  at  each  farm,  making  them  particularly  vulnerable  if  they  fall  ill or worse. In fact, it all feeds in to a vicious circle, with the hours, the physical demands and the reliance on key staff. As Richard Plowright showed at the end of his grower profile in OG29, you just don’t have time to be ill.

Some recommendations
I am  concerned  as  to  where  new  organic  growers  are  going  to  come  from,  how  they  will  become  established  and  also  about  those who will succeed the current generation of growers. There will be  those  that  don’t  mind  living  on  nothing  and  those  that  don’t mind working all hours, whose personal or family situation allows it. There will be those who already have money to bring to a new  growing  project  or  simply  to  sustain  an  existing  one. But this all feels like an incredibly small pool of potential growers, and an enormous restriction on a sector which should be expanding.

I don’t  want  to  seem  critical  or  all-knowing  in  making  any  of  these comments. I’m definitely not - I’ve just spent five years on a  business  that  hasn’t  succeeded  and  I  can  write  many  more  words criticising myself. However, I think there are some practical solutions we can draw out of all this:

More shared production statistics and financial benchmarking
There is a need for this above all else and I would love to see the OGA, ORC (Organic Research  Centre  Elm  Farm) or some other shared access website, hosting wiki-type pages that growers could add to, describing for example:

• Planting and harvesting rates, yields of different fruit & veg crops

• Key   comparative    business    costs    such    as    insurance,    maintenance, rent

I think this would start the process of reducing the blindness with which growers approach financial forecasts and business planning.

From this basic level of shared information, perhaps we could progress towards  more  comparative  gross  profit  analyses of  crops  -  much  like  what  is  currently  in  the  Organic Farm Management Handbook (OFMH), but more extensive in various ways. This is  a  great  publication  and,  again,  I  don’t  want  to  appear  unnecessarily  critical,  but  I  suspect  it  is  of  less  relevance to many of the farms we visited, including our own. To me, the data appears more relevant to highly mechanised large-scale units on grade 1 or 2 soil with low weed burden. It also omits crop-specific green manure costs and incorporation costs from  its  calculations,  and  while  it  covers  a  wide  range  of crops (18 field veg and 3 fruit in the 2014 edition), there’s many more it doesn’t.

Perhaps we  could,  eventually,  move  towards  a  place  where  we  have  well-evidenced  shared  information  that  is  relevant  to  a  full  range  of  crops,  across  a  range  of  soil  types,  and  a  range  of  growing  systems  including  for  example  no-dig,  ‘bio-intensive’  and  agroforestry. If this  was  a  shared  endeavour,  administered  online, we could achieve a lot at relatively little cost. How much easier would it be for us all to plan our businesses with this kind of resource?

Costed-up models of profitable veg growing
We need more of these, including much more detail than is currently available from various books on organic growing. Addressing the lack of profit in veg growing - is there more we can share with each other as to best practice, or more information about growing businesses? We should  perhaps  leave  the  discussions  around  profitability of farm shops to an organisation like FARMA, or box schemes to BOBS (British Organic Box Schemes) or the Growing Communities-inspired Better Food Traders group - or at least start by just concentrating on the growing side of things.

Following our  research  last  year  I  realised  that  there  are  very  few clear examples of veg growing that’s profitable on its own, without retail or other diversification. But, there are at least some out there,  and  if  possible,  it  would  be  very  useful  to  have  these  models explained and costed out in more detail.

Develop more links with landowners
It might  be  beneficial  to  develop  links  with  landowners  or tenants  who  already  have  capital  assets  that  could  be  used  towards   a   growing   business. The  work   of   the   Fresh   Start   Land   Enterprise   Centre   is   particularly   interesting   (http://freshstartlandenterprise.org.uk/),  especially  their  work  around  different  forms  of  land  partnerships  and  their  matchmaking  service   bringing   together   people   with   business   ideas   with   landowners. The   Ecological    Land    Co-operative    (http://ecologicalland.coop/) is another fantastic initiative.

We just might have to accept that land ownership, as well as house ownership, is  increasingly  out  of  reach  to  the  next  generation  of  growers. We must  find  assets  of  land,  infrastructure  and machinery that are already in place but perhaps currently under-utilised. Through different sorts of partnerships, we must find ways to  get  businesses  established  in  a  lower-risk  way,  or  just  identify means of making it more affordable.

More promotion and  understanding  of  co-operative ways of working
I believe that many of the risks to people and skills could be avoided by a  greater  understanding  of  new  ways  of  working  –  it  could  be  business  partnerships,  on-farm  co-operatives  as  well  as  CSAs. My particular interest is in worker co-operatives, like Moss Brook Growers, although  there  are  better  examples  than  us  in  different  parts of the UK. However, I felt this was one of the things we had got right. We’d been  able  to  get  weekly  hours  down  to  50-55  per  week,  all  of  us  taking  two  week  summer  holidays,  preferably  in  August  rather  than  July,  and  any  illness,  like  my  acute  episodes  of  back  pain,  were  properly  covered  by  colleagues. The stress  of  managing the business, making decisions, even the low pay was all shared because of our co-operative structure. It wasn’t perfect, but it worked well for us in making the job more manageable.

As a  background  to  this,  it  would  be  interesting  to  hear  from  growers  about  their  recruitment  or  succession  plans. We came  across a couple of veg-growing business owners who, for the last couple  of  years,  had  been  looking,  unsuccessfully,  to  pass  the  business on to someone else. During that period, and to date, there have been  quite  a  number  of  assistant  grower  roles  advertised,  many of which came with a guaranteed wage and, possibly, more certain or limited hours of work. How much easier has it been to recruit for assistant roles rather than find new business owners?

An obvious  reply  to  some  of  the  problems  listed  above  is  for  new entrants or growers like us, just to find an assistant grower role, which would be great! However, I’m not sure that helps the longer-term succession of these businesses - ultimately finding someone who  can  afford  the  high  risks  -  nor  does  it  help  those  who want to start new businesses to satisfy a growing market.

A postscript
At the  start  of  2016  we’re  looking  at  a  break  of  another  year  or  more  from  growing  at  Moss  Brook. It turns  out  that  we’ve  been  struggling with an extensive drainage issue, apparently two thirds of our land has not been draining for 4 years thanks to mistakes made  by  a  utility  company  (a  lengthy  subject  for  another  day)  So,  the  land  needs  another  year  to  recover. Whether we’ll  grow  there again is a bit unknown. Our workers’ co-op has split up as we’ve all had to find other work, and that work - certainly for me and  Stuart,  both  in  different  types  of  organic  retail  -  whilst  still  relatively  low  paid  is  providing  a  much  better  work-life  balance  while our kids are pre-school.

For me  personally,  I  want  to  get  back  to  growing  as  soon  as  possible, but it will have to be a job and business plan that is better thought through, based on better evidence and experience.

Rob Alderson Moss Brook Growers (& Manchester Veg People)